Institutional investors are once again scouring the hard-hit Atlanta real-estate market for bargains. In another recent deal, Parkway Properties Inc. last month said it was on track to buy the office and retail portion of the 50-story tower at 3344 Peachtree Road for about $346 a square foot in one of the priciest office-building sales Atlanta has seen in years.But that building is located in Atlanta's tony Buckhead section and is 93% leased. The price being paid in the Atlantic Station deal reflects relatively weak demand for properties that are a bit more challenged.

The 25-story office building is only 40% occupied. Since its completion in 2009, it has struggled to compete for tenants in a fiercely competitive market where the third-quarter office-vacancy rate of 20.8% hovered near a 25-year high, according to Reis Inc., a real-estate research firm. The retail complex is about 88% leased, although Mr. Maddocks says there are a number of expiring leases and some of the tenants aren't paying rent.

"That someone is willing to shell out this kind of money is certainly not bad news, but I'm not sure it implies any blessing on the Atlanta market," says Ben Carlos Thypin, a senior market analyst with Real Capital. "There's still a lot of pain."

Investor wariness of Atlanta is reflected by relatively low sales activity. The combined volume of retail and office sales in the Atlanta region rose just 6% last year to $901 million, from $846.8 million in 2009, according to Real Capital. By comparison, investment sales of retail and office properties in New York and its suburbs more than tripled to $7.4 billion last year from $2.3 billion a year earlier.

Ben Carlos Thypin

I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.